Ten Home Insurance Myths Coloradans Should Know

When shopping for homeowners insurance in Colorado, understanding what to look for is key to being protected and saving money. There are several home insurance myths that Coloradans must contend with to separate misinformation from the truth.

One of the best ways to avoid common home insurance myths is to work with a licensed homeowners insurance agent. These experts can help you navigate finding coverage for your home and save you frustration with knowledgeable advice and truthful insight.

The team at Freedom Insurance Group has been helping homeowners since 2005 save money and find coverage for their homes that fit their needs. Avoid popular home insurance myths and stay better protected with a team on your side.

 

Ten Home Insurance Myths and Facts in Colorado

Home insurance myths can end up costing you big. Not only does the misinformation hinder your search, but you can also find yourself not fully covered as you should be when you enroll and/or pay more than you need to for coverage.

Below, we’re separating fact from fiction and examining some of the top home insurance myths you might come across on your journey. Be sure to refer to these home and auto insurance myths to avoid being improperly covered or overpaying for your policies:

 

Home Insurance Myth #1: You Don’t Need Flood Insurance

There are several weather conditions and natural disasters that can be a peril to your home. These destructive forces can cause immense losses to your property and they are the leading reason for submitting a home insurance claim each year. But if you’re counting on home insurance to cover you for flooding, you’re mistaken.

While floods don’t happen every day, the threat of this loss continues to evolve throughout the Centennial State. This is for many reasons including changing weather patterns, an increase in concrete structures, and the state’s uptick in wildfires.

All of these factors play a role, but if you’re going to protect your home and personal belongings from flooding, you’ll need a separate flood insurance policy. It’s worth noting that the same is true for renters looking to protect their personal belongings as a renter policy won’t be enough.

 

Home Insurance Myth #2: Earth Movement Is Covered

Similar to flooding, there is a notion that a homeowners insurance policy will blindly cover any and all weather events. This simply isn’t so. While many weather events, such as hail, tornadoes, and lightning are all covered by a standard home insurance policy (HO3), earth movement is not.

As noted by the Colorado government, land movement is a natural thing that affects the state on an ongoing basis. However, this can come in many forms such as sinkholes, landslides, debris flows, and more.

In order to protect yourself from earth movement, you’re going to need more than just a standard home insurance policy. You may be better suited for a HO5 policy, which may cover you if the carrier agrees to not exclude it, but expect to pay a higher premium.

Additionally, with an HO3 policy, certain riders may be available to help you mitigate this risk. It’s also worth noting that earthquake insurance may also be available, and finally, for debris flows, you may need flood insurance in order to file a claim.

 

Home Insurance Myth #3: Coverage for Home Value vs. Building Costs

The idea many homeowners have is that their home insurance coverage is going to cover whatever their home is worth. However, real estate markets fluctuate and typically rise over time. Therefore, what your home is worth when you bought it compared to what it’s worth today, won’t be the same.

This factor alone suggests that homeowners will likely need more coverage over time, a statement that is also typically true. But you’ll also want to understand this is due to the cost of repairing your home, not its value. Let’s break this down further:

• If your home raises in value, you won’t receive that amount in reimbursement. You will, however, receive the amount dictated by your policy.
• Your coverage limits will likely need to rise over time because it costs more to repair your home as inflation causes both materials and labor to rise.
• Finally, it’s also worth mentioning that just because you have expensive materials, doesn’t mean your home value will reflect such features. Therefore, to cover these expensive upgrades, it’s important that your policy limits are adjusted accordingly.

In recent years, the cost to rebuild homes has skyrocketed and moved about with a bit of unpredictability due to economic factors. Regardless of the outside factors affecting what it would cost to restore your home, it’s still important to stay prepared and base your coverage on what your home would need to be rebuilt after the worst-case scenario.

 

Home Insurance Myth #4: All of Your Personal Belongings Are Included

Personal belongings are covered by your homeowners policy, but that doesn’t mean there isn’t a limitation. Policy limits exist and for expensive valuables, such as jewelry, art, high-end fashion, firearms, etc., you’ll likely need to purchase an insurance rider to extend your coverage.

While a Colorado home insurance policy is well equipped to cover things like a damaged iPad or the loss of clothing, it’s another situation entirely to have a $20,000 home theater system or several designer bags covered by the same coverage.

Your personal belongings are covered, even when they aren’t in your home, but if you have a large value of goods in need of protection, it’s important to disclose this information to your agent and find the right option for your needs.

 

Home Insurance Myth #5: Broken-Down Appliances Are Covered

If your home were to suffer from a kitchen fire and you needed an appliance replaced, you’d file a claim, and under normal circumstances receive reimbursement for your loss. However, general wear and tear aren’t covered by an HO3 policy, and if your refrigerator breaks, you’re going to need a home warranty.

It’s your responsibility as the homeowner to keep up with routine maintenance and cover wear and tear issues. Also, it’s worth noting that this doesn’t just apply to an appliance either. If you have a neglected roof, you won’t be covered and if it leads to other issues they won’t be covered either.

Sudden and accidental damage is fine. That’s why Colorado home insurance exists in the first place. But destructive forces that come about over time and haven’t been kept up will not be accepted by your insurance carrier.

 

Home Insurance Myth #6: Your Home Business Is Protected

Without small businesses, Colorado would look a lot different. They are pillars in the community and many are operated right out of the owner’s home. But if you don’t have the right Colorado business insurance policy in place and suffer a loss, don’t expect your home insurance coverage to be there for you.

This can be a huge problem because not only are you opening yourself and your home up to losses that may stem from your business, but there are increased liability concerns that may occur if customers and suppliers are visiting the premises.

Another issue you may encounter is dealing with operating your personal vehicle for business use. If you don’t have a commercial auto insurance policy, even if you’re a contractor or delivering an order from your online business, and a loss occurs, you won’t be able to file a claim.

When operating a business out of your home, the best thing you can do is have commercial insurance policies in place to be prepared no matter what. Remember, a home or auto insurance policy in Colorado won’t cover your loss otherwise.

 

Home Insurance Myth #7: You Don’t Need Coverage Once Your Home Is Paid Off

Many homeowners may consider cutting home insurance once their homes are paid for. This is a bad idea for many reasons, specifically, because most homeowners don’t have the funds to rebuild should they suffer a total or severe loss.

Not only will you lose your home but you’ll lose your equity. Paying off your home represents sound financial practices that have come together over time to benefit your family. Without a home insurance policy, all of that is put in jeopardy.

Even if you can afford to rebuild, the money you’ll spend to get back on your feet could have been used in many other ways. This all comes as the price of materials and labor and rising interest rates elevate the cost of buying a home.

 

Home Insurance Myth #8: Pests Are Covered

In a similar vein that general wear and tear aren’t covered, pest damage isn’t either. You’ll need to make sure that any pest problems are handled either on your own or by hiring a pest control company for their services.

No one wants to live with or near pests as they are gross and annoying, but some are also destructive. Termites and wood ants can destroy the integrity of your home, but you’ll need to stay current on your protection and make repairs as needed because home insurance doesn’t cover these losses.

 

Home Insurance Myth #9: My Policy Pays for My Family’s Injuries

One of the homeowners insurance myths that need to be debunked is how your policy handles injuries to your family. Let’s be clear, it doesn’t. Although an HO3 policy is going to provide coverage for injuries suffered by visitors, members of your household are excluded.

The purpose of this coverage is to protect homeowners from lawsuits and liability when entertaining or in other events in which visitors are present. But for those within your home, you’ll need to purchase health insurance to cover medical bills as your home policy won’t provide reimbursement.

 

Home Insurance Myth #10: Adding Coverage Wastes Your Money

Of all of the home insurance misconceptions, the idea that more coverage is a waste of money may be ironically the one that can cost you the most. While you can in fact have too much coverage, adding protection responsibility is a great way to protect your finances in both the long and short term.

Myths about homeowners insurance costing too much already and forgoing additional coverages isn’t a great plan to follow, because while you’re hoping for the best, you’re also ill-prepared for the worst.

Everyone has different needs, risk tolerances, and perils that can harm their property. Rather than looking to add every coverage available, it’s better to make sure that you have enough coverage for your home in case of a major loss and specific coverages that make sense for your needs.

For example, if you live in an area prone to flooding, you’ll want to be sure that you are current with the coverage limits you have, are enrolled in flood insurance, and may want to look into a water backup rider.

Should you live in an area prone to hail damage and you keep collectibles in your garage that could be susceptible to a loss but are quite valuable, then scheduled personal property coverage and an increase in your policy’s personal property coverage limits may better suit your needs.

 

How To Dispell Home Insurance Myths in Colorado and Save On Your Coverage

For many reasons, home insurance changes over time. This happens because needs change, premiums may rise, economic conditions evolve, etc., and it can be difficult for homeowners to be sure that they’re getting the right coverage at the best price whether it’s your first time or several years down the line.

Here at Freedom Insurance Group, our team of expert, licensed home insurance agents are here to help you for the long haul. Rather than navigating common home insurance myths as you search for the best coverage, we’re here to help guide you to the policy that is right for you.

Our partnerships with several top-rated home insurance companies in Colorado allow us to help you save money while still enrolling in personalized coverage that meets your needs:

• Because we work with multiple top-rated brands, you not only gain better access to discounts, bundles, and lower prices, but you also gain an expert that is focused on providing you with the best option for your needs rather than a singular company’s.
• It also means you gain extra help every step of the way. Whether you are just signing up for the first time, need assistance submitting a claim, or wish to switch to a new policy because of a premium increase, we’re here for you.

The fact that we only work with top-rated carriers in Colorado means you’re insured by a trustworthy brand and our ability to compare premiums among them allows us to shop the lowest possible price for your policy.

From dispelling home insurance myths to finding you the lowest rate and the right coverage, our agents are ready to help you. Give us a call at the number above or get a free, online home insurance quote today!